BEFORE THE MANDYA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANDYA PRESENT: 1. SIDDEGOWDA, B.Sc., LLB., President, 2. M.N.MANOHARA, B.A., LLB., Member, 3. A.P.MAHADEVAMMA, B.Sc., LLB., Member, ORDER Complaint No.MDF/C.C.No.49/2009 Order dated this the 27th day of July 2009 COMPLAINANT/S Mohamad Ibrahim S/o Late Hussain Khan, R/at Moolehatti, Old Post Office Road, Nagamangala Town, Mandya District. (By Sri.S.N.Nagaraj., Advocate) -Vs- OPPOSITE PARTY/S The Branch Manager, L.I.C. of India, Kalegowda Complex Building, Mysore Road, Krishnarajapet, Mandya District. (By Sri.S.Sudarshan., Advocate) Date of complaint 13.05.2009 Date of service of notice to Opposite party 29.05.2009 Date of order 27.07.2009 Total Period 1 Month 28 Days Result The complaint is dismissed. However, there is no order as to costs. Sri.Siddegowda, President 1. This complaint is filed under section 12 of the Consumer Protection Act, 1986 against the Opposite party claiming insurance amount of Rs.40,000/- with costs. 2. The case of the complainant is that Smt.Dilshad Banu the wife of the complainant had insured her life with Opposite party under the Scheme LIC Golden Jubilee Policy (Bima Gold) for a sum of Rs.40,000/- on 28.03.2006 for a period of 20 years, vide policy no.723235574 and the quarterly premium is Rs.634/-. Smt.Dilshad Banu has continuously paid the quarterly premium to the Opposite party till her death. On 16.11.2007, the insured paid Rs.1,297/- towards the quarterly premium which covers the period from June 2007 to September 2007 and the Opposite party has accepted the amount and issued a premium receipt. But, unfortunately the said insured died on 16.11.2007. The complainant being a nominee submitted claim application to Opposite party, but the Opposite party has repudiated the claim. When the Opposite party has accepted the quarterly premium and issued receipt on 16.11.2007, the Insurance Bond shall consider to be in force and the rejection of the claim by the Opposite party amounts to deficiency in service. The complainant is entitled to insurance amount. In spite of legal notice dated 06.10.2008 the Opposite party has sent untenable reply. Therefore, the present complaint is filed. 3. The Opposite party has filed version, admitting that Dilshad Banu has obtained insurance policy for Rs.40,000/-. The last premium paid was March 2007. Denying that life assured was paying the premium regularly, it is contended that quarterly premiums for June 2007 and September 2007 was paid on 16.11.2007 at Canara Bank, Nagamangala Taluk. Denying that the deceased paid the premiums for June 2007 and September 2007, it is pleaded that the deceased life assured died at 1.50 a.m. on 16.11.2007 and after the death of the life assured, the premium was paid by the complainant on her behalf at Canara Bank, Nagamangala during banking hours. So, the policy was lapsed condition at the time of death of the life assured. As per condition no.2 of the policy a grace period of 30 days is allowed for payment of quarterly premium. The premium is not paid within the days of grace the policy lapses. As per the condition no.5 of the policy, the policy is void and nothing becomes payable under the policy. As per the claim form, the complainant himself has admitted that the life assured died at 1.50 a.m. on 16.11.2007. As per Medical Attendants certificate of Victoria Hospital, Bangalore, the death of the life assured occurred on 1.50 a.m. on 16.11.2007. The complainant in order to make unlawful gain, paid the premium on a lapsed policy after the death of the life assured. As per terms of the contract, nothing becomes payable under the lapsed policy. The Opposite party repudiated the claim, Opposite party has not committed deficiency in service. Therefore, the complaint is liable to be dismissed with costs. 4. During trial, the complainant is examined and has produced Ex.C.1 to C.13. Opposite party is examined and Ex.R.1 and R.2 are produced. 5. We have heard both the sides. 6. Now the points that arise for our considerations are:- 1. Whether the repudiation of the claim by the Opposite party is justified? 2. Whether the Opposite party has committed deficiency in service? 3. Whether the complainant is entitled to insurance amount of Rs.40,000/-? 7. Our findings and reasons are as here under:- 8. The undisputed facts borne out from the materials on record are that Smt.Dilshad Banu, the wife of the complainant has obtained Bima Gold policy for Rs.40,000/- for a period of 20 years, commencing from 28.03.2006 and premium is payable Rs.634/-quarterly and Opposite party has issued the bond as per Ex.C.1. It is admitted fact that the first premium is paid as per Ex.C.8 on 28.03.2006 and then as per Ex.C.7, the premium for June 2006 and September 2006 were paid on 31.08.2006. Then, the premium for December 2006 was paid as per Ex.C.9. The premium for March 2007 was paid as per Ex.C.10 on 27.03.2007. The premium for June 2007 was not deposited, but the premium for June 2007 and September 2007 was paid on 16.11.2007 as per Ex.C.11 with late fee. It is an admitted fact that the Dilshad Banu died on 16.11.2007 as per Ex.C.13 and the complainant being the nominee submitted the claim form with claimant statement as per Ex.C.2 and the exact time of death is mentioned as 1.50.a.m. Even, the Medical Attendants Certificate and Certificate of Hospital Treatment issued by Medical Officer of Victoria Hospital, Bangalore, as per Ex.R.1 & R.2, the insured Dilshad Banu died in the Hospital at 1.50 a.m. on 16.11.2007. The complainant was informed as per Ex.C.3 that the insurance claim is not payable, since it was not in force. Then, the complainant got issued a legal notice as per Ex.C.4 and the Opposite party has sent reply as per Ex.C.5 clearly stating that the premium for June 2007 and September 2007 was remitted on 16th November 2007 and the date of death is 16th November 2007 at 1.50 a.m., the premium is remitted after the death. When policy is in total lapsed condition at the time of death nothing is payable under the policy. 9. The contention of the complainant is that when the Opposite party has collected the premiums, it shall be deemed that the policy was in force and the rejection of the claim is not justified and he has relied upon the decision reported in III (2006) CPJ 109, in the case of Ram Parkash Pahwa Vs- LIC of India by the Honble National Commission. It was a case pertaining to money back, wherein at every 4 years if the policy in force and premiums are paid regularly, the insured is entitled to refund of Rs.10,000/-, because the policy was for Rs.50,000/- and the insured in that paid only 2 half yearly installments. Thereafter, he omitted to make any payment towards premiums. The policy obtained on 20th October 1993. However, on 3rd October 1998, the insured wrote a letter for revival of the policy by enclosing medical report with a request to adjust the survival benefit of Rs.10,000/- which had become payable on 20th October 1997 against the premium and he has also deposited the difference of the arrears of premium amounting to Rs.8,032/- as demanded by the LIC by its letter dated 3rd October 1998 and sent medical certificate. Despite the completion of the said formalities, the LIC failed to revive the lapsed policy and by letter dated 9th October 1998 called upon the petitioner to furnish encashment certificate of the cheque sent by him. The LIC has also failed to intimate the premium due from the petitioner and without furnishing any details and the complaint was filed for compensation of pecuniary loss and harassment and mental agony. The Honble National Commission has held, the contention of the petitioner that the LIC ought to have paid interest on the survival benefit of Rs.10,000/- is rightly repudiated by the LIC. Since, the policy has lapsed, unless it was revived, there is no question of paying any interest on the said amount. Further, without receiving the premium, there is no question of paying the interest on the said amount. As stated above, only on 3rd October 1998, the complainant sent the proposal for revival of the policy by sending only Rs.8,032/-. The said amount was sent as if the policy was revived and the complainant was entitled to survival benefit amounting to Rs.10,000/-. The next contention of the complainant that the LIC unjustifiably demanded the encashment certificate of the cheque sent by the complainant has to be accepted, because it was the duty of the Officer of the LIC to verify their bank statement and find out whether the cheque deposited by them was honoured. Therefore, asking for the certificate of the encashment of the cheque is totally unjustified and the Honble National Commission held that there was unjustifiable delay in reviving the policy and the act of the demanding encashment certificate of the cheque from the complainant was nothing, but an act of harassment to the complainant and therefore, the LIC has committed deficiency in service and cost of Rs.25,000/- was awarded. So that decision is not applicable to the facts of the present case. 10. Admittedly in the present case, the premium for June 2007 and September 2007 were not paid in time and so the policy lapsed. Even though, the Opposite party has received the premium for the June 2007 and September 2007 on 16.11.2007 it was at 12.25 p.m. The Premium of two quarterly was deposited with late fee. It is admitted fact on 16.11.2007, the said insured died in the hospital at Bangalore. As per Ex.C.2 the claimant statement given by the complainant, the exact time of death is shown as 1.50 a.m. Even, the Medical Attendants Certificate and certificate of hospital treatment issued by RMO, Victoria Hospital, Bangalore by insured Dilshad Banu admitted to hospital on 14.11.2007 and died on 16.11.2007 at 1.50 a.m. Even, the complainant has admitted in his oral evidence that his wife died on 16.11.2007 at 1.50 a.m. He has also admitted that on 16.11.2007 he deposited the premium amount at Canara Bank, Nagamangala. Even though, the insured had died at 1.50 a.m. on 16.11.2007, the complainant has deposited two quarterly premiums as per Ex.C.11 and C.12, on 16.11.2007 at 12.25 p.m. So, when the premium was paid, the insured was not alive but dead. In spite of the death of the assured, the complainant has deposited the amount. Naturally, the bank will not be aware at the time of receiving the premium, whether the assured is alive or not and the depositor has to disclose. The evidence clearly proves that the insured has not deposited the amount and it is the complainant who has deposited the insurance premium with late fee for two quarterly premiums in Bank, though it is known to him that the insured is dead earlier. Merely because, the Opposite party has issued a premium receipt of renewal of the policy, but the policy was lapsed for non-payment of premiums for June & September 2007 within the grace period of 30 days, when the insured was alive. If the premiums are paid after death of the insured, there is no question of renewal of policy when already the policy was lapsed. So, it clearly proves only for the sake of claiming insurance amount, after death of his wife, the complainant has deposited the two premiums with late fee. In the circumstances, we cannot accept that the policy is deemed to be valid in force when the premium receipt was issued. For renewal of the policy or revival of the policy, the insured must be alive and after death of the insured there is no question of revival of renewal of the policy. As per condition no.2 of the policy if the premium is not paid within the 30 days of grace, the policy lapses and the premiums paid shall belong to the LIC Corporation in case of lapsed policy and nothing is payable as per condition no.5. Therefore, the repudiation of the claim by the Opposite party is justified and the complainant has failed to prove that the Opposite party has committed deficiency in service. 11. It is submitted by the learned counsel for the complainant that even if the complainant is not entitled to insurance amount of Rs.40,000/-, the Opposite party may be ordered to refund the premiums paid, but there is no provision in the contract of insurance to repay the premiums paid in case of lapsed policy. Even, the complainant is not entitled to refund of Rs.1,296/- deposited under Ex.C.11 after death of insured, because with motive to set insurance amount in spite of the death of his wife insured, the complainant has deposited this amount to have wrongful gain. Therefore, the complainant is not entitled to refund of this amount. 12. In the result, we proceed to pass the following order; ORDER The complaint is dismissed. However, there is no order as to costs. (Dictated to the Stenographer, transcribed, corrected and then pronounced in the open Forum this the 27th day of July 2009). (PRESIDENT) (MEMBER) (MEMBER)
